Challenges of the Output-Employment Growth Imbalance in Transition Economies 
Vladimir Mihajlovic 

University of Kragujevac, Faculty of Economics, Serbia 
vmihajlovic@kg.ac.rs 


Gordana Marjanovic 

University of Kragujevac, Faculty of Economics, Serbia 
gmarjanovic@kg.ac.rs 


Abstract 

The trade-off between output and unemployment has become an essential part 
of modern macroeconomics and is known as Okun's law. However, in transition and emerging markets economies' context, the output-employment nexus has a much more important role as these countries strive to significantly improve the 
growth dynamics of both variables. This paper aims to analyze the particularities of this relationship in selected Central- and South-Eastern European transition 
(and former transition) countries to find out a discrepancy between the output and employment growth. Therefore, the employment elasticity coefficients are calculated. The estimated results suggest that, in the observed period, economic growth has not contributed to satisfactory employment growth, which is commonly referred to as a "jobless growth" hypothesis. Accordingly, this paper 
attempts to single out the main challenges of the output-employment growth misbalance in these countries and propose adequate policy measures that could 
reduce it. The industrial policy that differentiates from the "one-size-fits-all" 
paradigm is emphasized as the most important part of macroeconomic policy 
in transition economies to make their development more balanced. Additionally, short-run stabilization policy, especially the one focused on the labour market, has a significant role in these economies. 
Keywords: economic growth, employment elasticity, Okun’s law, labour market, 
transition economies 


Introduction 

The nexus between unemployment and output growth is one of the most frequently analyzed macroeconomic relations. It is commonly referred to as 
Okun’s law, in honour of Arthur Okun, the first who has recognized the presence 
of the relationship in the United States (Okun, 1962). Okun’s law indicates the negative relationship between unemployment and economic growth, stating that an economic upturn increases labour demand and thus reduces the unem­ployment rate. 
ORIGINAL SCIENTIFIC PAPER 
RECEIVED: JANUARY 2021 REVISED: APRIL 2021 ACCEPTED: MAY 2021 
DOI: 10.2478/ngoe-2021-0007 UDK: 330.34:005.953:331.5 JEL: C22, E24, F43 
Citation: Mihajlovic, V., & Marjanovic, 
G.(2021). Challenges of the Output-Employment Growth Imbalance in Transition Economies. Naše gospodarstvo/Our Economy, 67(2), 1-9. 
DOI: 10.2478/ngoe-2021-0007. 


NAŠE GOSPODARSTVO OUR ECONOMY 
Vol. 67 
No. 2 

2021 
pp. 1–9 

A kind of alternative view about the linkage between the situation in the labour market and economic growth is to observe the employment-output nexus. Although the un­employment reduction might not necessarily be closely connected with the employment growth (i. e. in the case when there is intensive emigration of the unemployed labour force), the relationship between employment and output growth is assumed to be positive. 
Albeit the importance of the two approaches could be treated as identical in the case of developed economies, the situation in transition countries will often be different. Namely, if the unemployment rate in transition economies decreases, it could be a sign that the growing number of 
unemployed is finding a job. It can also indicate that these unemployed persons leave to other countries to find a better 
work opportunity. Indeed, when one observes the New European Union (EU) Member States, the opening of their borders has often been followed by intensive emigration of unemployed workers to the more developed Western European countries (Zaiceva, 2014). 
Therefore, this paper aims to analyse the nexus between employment and output growth in selected Central and South-Eastern European (former) transition economies, to investigate the extent to which the dynamics of these variables is balanced. The motivation lies in the fact that the transition process has often induced different growth imbalances of these variables. The most frequently analyzed misbalance of the sort is commonly referred to 
as a "jobless growth" or "jobless recovery", which occurs 
when the employment growth is relatively lower than output growth. Having in mind that the presence of these imbalances could prevent the economic growth from being more balanced and sustainable, along with the fact that it affects the standard of living in the countries faced with the problem, it is essential to identify its potential sources to propose adequate economic policy response. According to the defined aim of the study, the following research hy­potheses are tested: 
H1: In observed economies, the economic growth is ac­companied by a less-than-proportionate growth of employ­ment, indicating the presence of a jobless growth problem. 
H2: The employment elasticities are higher in the econo­mies which have completed the transition process earlier. 
The first hypothesis is tested by calculating the employ­ment elasticity coefficients by regressing the employment 
growth on the output growth. The second hypothesis is based on the premise that the transition process in the par­
ticular economy had been completed when it joined the EU. 
Accordingly, the observed (former) transition economies 
are divided into the countries which have joined the EU in 
2004, in 2007, and are still in the process of accession to 
compare their employment elasticity coefficients. 
The rest of the paper is structured as follows. The second section elaborates on some of the basic characteristics of the Okun's law relationship and the linkage between employ­
ment elasticity and Okun's coefficient. The third section 
reviews the recent and most important empirical studies to date, whereas the fourth presents the research methodology 
and data used. In the fifth section, the empirical results and 
discussion is provided. Finally, the sixth section contains the main conclusions and policy recommendations. 


Theoretical Background 

The relationship between unemployment and output growth embodied in Okun’ law is commonly presented as follows (Ball et al., 2015): 
˜u°.˜..,b.0,(1) 
aby
ttt

where a represents a constant, b refers to the “Okun’s coefficient”, ut and yt are unemployment rate and real output changes, respectively (.u=u-u; .y=yt-yt-1), whereas . 
ttt-1t

represents the error term. This is known as the first difference version of Okun’s law equation. Okun’s coefficient measures 
the unemployment elasticity with respect to the real output changes (economic growth). 
Since this study aims to enlighten the relation between employment and output growth, Equation (1) can be transformed in the following way: 
˜n°a..˜y.., (2) 
ttt

where n denotes employment, whereas e represents the employment elasticity to the output changes. Having in mind the economic growth is equal to the sum of employment growth and labour productivity growth, the value of 
coefficient e depends on the relative impact of these factors. 
If we express this in a more formal way, we get: 
˜y°˜n.˜p, (3) 
where p refers to the labour productivity, measured as n/y. If we assume a constant economic growth, it means that any increase in employment must be accompanied with an equal decrease in labour productivity. Namely, by dividing 
.p

˜°.,(4) 
.y

where employment elasticity (e) equals to .n/.y. The values of the coefficient e can be positive and negative, and should be interpreted in a way presented in Table 1. 
Table 1. Interpretation of the employment elasticity coefficient values 

NEG PEG 
e < 0 
PPG NPG 
PEG NEG 
0 = e = 1 
PPG NPG 
PEG NEG 
e < 1 
NPG PPG 

Notes: NEG – negative employment growth, PEG – positive employment growth, PPG – positive productivity growth, NPG 
– negative productivity growth Source: Kapsos 2005, 4 


Literature Review 

Bearing in mind the theoretical and practical importance of Okun’s law, several empirical studies dealt with the rela­tionship between unemployment, employment, and output growth. Ball et al. (2017) provide an extensive analysis of the Okun’s law stability in the United States since 1948 and in 20 advanced economies since 1980. They indicate that the relationship between output and unemployment is quite stable over time in most of the analysed countries, whereas the unemployment rate responds more strongly to output in recessions than during expansions. Similar conclusion can be found in Kargi (2016) for all OECD countries over 1987­2012 period. On the other hand, Owyang and Sekhposyan 
(2012) and Grant (2018) find evidence of substantial time variation of the Okun’s coefficient in the United States, espe­cially after the Great Recession of 2008. Novák and Darmo (2019) investigate the Okun's law in EU28 in the period 2000-2014, and two sub-periods: pre-crisis (2001-2007) and the post-crisis period (2008-2014). Their study reveals the 
higher Okun's coefficient in the post-crisis period. Kapsos 
(2005) provides an extensive analysis of employment elas­ticities in developed and transition countries to investigate the impact of employment and productivity on economic growth in the function of poverty reduction. In similar research, Misztal (2014) estimates the employment elastici­ties in the Global Triad Countries (US, EU-15, Japan), China 
and India, aiming to examine the sustainability of the jobless 
growth hypothesis in these countries. 

The research of the jobless growth problem in empirical 
studies is also commonly tied to Okun's law asymmetry assumption. Namely, employment (unemployment) exhibits an asymmetric pattern if it responds differently in contrac­tionary and expansionary phases of the business cycle. Several empirical studies are devoted to this kind of analysis. Empirical findings commonly underpin the theoretically es­tablished fact that unemployment reacts more intensively to the negative changes in the output (in recessions) than to the output increases in expansion. For instance, Harris and Sil­
verstone (2001) confirm the presence of asymmetry between 
unemployment and output in seven OECD countries, whereas Silvapulle et al. (2004) analyze post-war US data and demon­strate that the short-run cyclical unemployment is more sen­sitive to negative than to positive cyclical output, which indi­
cates asymmetry in their relationship. Caraiani (2012) finds evidence that Okun's coefficient is higher during a recession 
and lower during expansion in Romanian economy. A similar conclusion for nine transition countries is made by Cevik et al. (2013). They demonstrate that cyclical unemployment is more sensitive to cyclical output in downswing regimes than 
upswing regimes, as well as that the Okun coefficients vary 
across regimes and countries. 

Yet, some other studies confirm the opposite phenomenon, so called “labour hoarding” hypothesis: economic downturns lead to a lesser unemployment growth since firms are reluc­tant to fire trained workers (e. g. Leitner & Stehrer, 2012; 
Nebot et al., 2019). There is also empirical evidence that labour hoarding is present in transition countries, especially in the early stages of the reform process, due to administrative 
constraints aimed to stop firing (Boeri & Garibaldi, 2006). 
Having in mind the subject of previous empirical research, 
this study tries to add further to the literature by estimat­ing the employment elasticities in selected (former) tran­sition countries from Central and South-Eastern Europe to quantify the extent to which the economic growth in these 
economies is "jobless", as well as to identify the key sources 
of such imbalance. 


Methodology and Data 

To quantify the employment elasticities in observed econo­mies, the model given by Equation (2) is estimated. 
Hence, we regress the employment growth on the output growth to estimate the value of the employment elasticity 
coefficient (e). For that purpose, the Ordinary Least Squares 
method is employed. 
The analysis includes nine (former) transition countries from Central and South-Eastern Europe: Bulgaria, Czech Republic, Estonia, Hungary, North Macedonia, Poland, Romania, Serbia, and Slovakia. The sample consists of 
countries that have joined the EU in 2004 (Czech Republic, 
Estonia, Hungary, Poland, and Slovakia), in 2007 (Bulgaria and Romania), and that are still in the accession process (North Macedonia and Serbia). The analyzed time period is 2000Q1-2019Q4 (80 observations) for all countries except for North Macedonia (2006Q1-2019Q4, 56 observations) and Serbia (2008Q1-2019Q4, 48 observations). The time 
series consists of quarterly, seasonally adjusted data about 
the number of employed persons and the real output (chain linked volumes, 2015=100). The source of data is Eurostat. 
Figure 1 presents the empirical dynamics of the number of employed persons (left scale) and the real output (right scale) in observed countries. The data are transformed into logs using a natural logarithm. It is evident that the relationship between employment and output is different across coun­tries. However, one can observe a kind of structural break in time series due to the Great Recession (2008). Indeed, 
this break is identified by the Zivot-Andrews test (Table 3). 
Accordingly, to make the estimation results more robust, in further analysis, the model is estimated not only for the entire period but also for two sub-periods: 2000Q1-2008Q4 and 2009Q1-2019Q4. In such a manner, it is possible to observe the tendency of the employment elasticity change as an important indicator of the employment-economic growth linkage over time. 
Figure 1. Empirical dynamics of employment and GDP in observed economies 
g pi y pl y  
8.16  Bulgaria  9.5 8.56  Czechia Czech Republic  10.9 6.56  Estonia  8.8  
8.12  9.4 8.54  10.8 6.52  8.7  
8.08  9.3 8.52  10.7 6.48  8.6  
8.04 8.00 7.96  9.2 8.50 9.1 9.0 8.48  10.6 6.44 6.40 10.5 6.36  8.5 8.4 8.3  
7.92  8.9 8.46  10.4 6.32  8.2  
7.88  8.8 8.44  10.3 6.28  8.1  
7.84  8.7 8.42  10.2 6.24  8.0  

00020406081012141618 00020406081012141618 00020406081012141618 Employment GDP 
Employment GDP 
Employment GDP Hungary North Macedonia Poland 

8.44 10.5 6.70 8.1 9.76 11.8 
6.65 8.0 9.72 11.7 8.40 10.4 6.60 7.9 9.68 11.6 

8.36 10.3 6.55 7.8 9.64 11.5 
8.32 10.2 6.50 7.7 9.60 11.4 
6.45 7.6 9.56 11.3 8.28 10.1 6.40 7.5 9.52 11.2 

8.24 10.0 6.35 7.4 9.48 11.1 
8.20 9.9 6.30 
7.3 9.44 
11.0 
00020406081012141618 06 08 10 12 14 16 18 00020406081012141618 Employment GDP 
Employment GDP 
Employment GDP Romania Serbia Slovakia 
7.92 9.28 

9.24 
10.8 
7.92 

10.0 9.16 
7.88 
9.24 
10.6 7.84 
9.20 7.84 

9.8 9.08 
7.80 
9.16 
10.4 
7.76 
9.6 
7.76 
9.12 

9.00 
10.2 
7.68 

9.4 8.92 
7.72 
9.08 
10.0 7.68 
9.04 7.60 
9.2 
00020406081012141618 2008 2010 2012 2014 2016 2018 00020406081012141618 Employment GDP 
Employment GDP Employment GDP 

Source: Own calculation based on Eurostat database (2020) 

Results and Discussion 

Before the estimation of the employment elasticities, the sta­tionarity properties of time series are checked by applying 
the Augmented Dickey-Fuller (ADF) test (Dickey & Fuller, 1979) and Phillips-Perron (PP) test (Phillips & Perron, 1988) for the presence of unit root in levels and the first 
differences (Table 2). It is evident that all-time series are sta­
tionary in the first differences, indicating that applying the linear regression model is completely justified. In addition, 
the stationarity is checked by Zivot-Andrews test of unit 
root with a structural break (Zivot & Andrews, 1992), which reconfirmed that the differenced time series are stationary 
(Table 3). Besides that, the structural break dates are identi­fied by the Zivot-Andrews test. It is apparent that the struc­tural break in time series is directly connected with the Great Recession of 2008. In line with that, as explained before, the 
two sub-periods are jointly analyzed. 
The results of employment elasticity estimates are reported in Table 4. According to the p-values, most of the estimates 
are statistically significant. Finally, Table 5 presents the 
results of residual diagnostic tests (for normality, serial correlation, and heteroscedasticity) all indicating that the models are well suited and stable. 
If we focus on Table 4 and observe the entire time period, 
it is evident that the employment elasticity coefficients are generally low, except in Bulgaria. In five out of nine coun­tries the employment elasticities are below 0.2, whereas in the case of North Macedonia and Serbia they are even negative (although for Serbia the results are not statistical­
ly significant). It indicates that, in the observed period, the 
employment reacted to a small extent concerning economic 
growth, supporting the jobless growth hypothesis. 
On the other hand, when we concentrate on the first sub-pe­riod (2000Q1-2008Q4), it is apparent that the employment elasticities are even lower in all cases, excluding Bulgaria. 
Therefore, the "joblessness" of output growth is more profound. It could be a corollary of the fact that a majority 
of observed countries have accessed the European Union in 2004 (Czech Republic, Estonia, Hungary, Poland, and 
Slovakia). The opening of state borders to labour flows 
has induced a number of workers from these countries to leave to more developed economies, thus reducing the em­ployment growth in them. Finally, in the post-crisis period (2009Q1-2019Q4), the employment elasticities are almost equal to the values for the entire time period, except in the case of Estonia and, to a lesser extent, in Romania, where 
these coefficients are higher. In contrast, in Bulgaria, the 
employment elasticity has been reduced in the post-crisis period. 

y -2.58 (3) -1.12 [3] -2.32 (1) -1.77 [0] -3.46* (0) -3.46* [0] 
n -1.79 (1) -1.01 [2] -1.79 (1) -1.56 [4] -2.48 (0) -2.49 [2] 
.y -3.75** (3) -6.11*** [4] -4.17*** (0) -4.18*** [2] -5.39*** (0) -5.52*** [4] 

y -1.99 (1) -1.79 [4] -4.41*** (0) -4.46*** [4] -1.02 (0) -1.19 [4] 
n -2.69 (0) -2.51 [4] -3.28* (1) -2.06 [6] -1.19 (2) -1.06 [4] 
.y -4.88*** (0) -4.79*** [3] -8.11*** (1) -16.54*** [8] -7.07*** (0) -7.07*** [3] 

y -1.59 (1) -1.12 [2] -0.43 (0) 0.01 [5] -3.62** (0) -3.71** [11] 
n -1.62 (0) -1.46 [3] -2.02 (1) -2.09 [3] -1.87 (1) -1.55 [1] 
.y -5.03*** (0) -4.93*** [5] -5.58*** (3) -6.89*** [3] -8.58*** (0) -9.87*** [9] 
.n -8.47*** (0) -8.55*** [3] -7.17*** (0) -7.61*** [9] -5.18*** (0) -5.14*** [2] 
Notes: the significance levels: *** – 0.01, ** – 0.05, * – 0.1; . is the first difference operator; for ADF test, the numbers in parenthesis 
indicate the lag order selected (Akaike information criterion). For PP test, the numbers in brackets indicate the truncation for the Bartlett Kernel, as suggested by the Newey-West test (1987). For PP test are calculated the one-sided p-values. Source: own calculation 
Table 3. The results of Zivot-Andrews test of unit root with structural break 

y -3.64*** (4) 2010Q4 -3.52*** (1) 2008Q4 -6.26*** (3) 2008Q4 
n -3.43*** (3) 2009Q3 -4.16*** (1) 2009Q1 -7.09*** (4) 2009Q1 
.y -5.98*** (3) 2008Q4 -5.41*** (0) 2008Q1 -4.07*** (2) 2007Q2 

y -4.81*** (1) 2008Q4 -4.75*** (0) 2010Q4 -4.61*** (4) 2012Q2 
n -3.85** (4) 2008Q4 -0.62* (2) 2009Q4 -5.32*** (3) 2006Q2 
.y -7.03** (0) 2008Q3 -7.75** (1) 2013Q2 -4.23** (4) 2008Q3 

y 

n -1.62 (0) -1.46 [3] -2.02 (1) -2.09 [3] -1.87 (1) -1.55 [1] 
.y -5.03*** (0) -4.93*** [5] -5.58*** (3) -6.89*** [3] -8.58*** (0) -9.87*** [9] 
.n -8.47*** (0) -8.55*** [3] -7.17*** (0) -7.61*** [9] -5.18*** (0) -5.14*** [2] 
Notes: the significance levels: *** – 0.01, ** – 0.05, * – 0.1; the numbers in parentheses indicate the selected lag length. Source: own calculation 
Table 4. The employment elasticities for observed economies 

-0.01 (0.13) 0.42 (0.00) -0.01 (0.17) 0.88 (0.02) -0.01 (0.12) 0.24 (0.09) 

0.00 (0.45) 0.14 (0.00) 0.00 (0.45) 0.12 (0.14) 0.00 (0.69) 0.15 (0.02) 

-0.00 (0.86) 0.22 (0.01) 0.01 (0.34) 0.09 (0.22) -0.00 (0.13) 0.71 (0.00) 

0.00 (0.29) 0.18 (0.01) -0.00 (0.21) 0.16 (0.02) 0.01 (0.06) 0.22 (0.03) 

0.01 (0.00) -0.12 (0.07) --0.01 (0.00) -0.16 (0.04) 

-0.00 (0.32) 0.27 (0.00) 0.00 (0.79) 0.25 (0.02) -0.00 (0.04) 0.28 (0.00) 

-0.00 (0.04) 0.21 (0.04) -0.00 (0.26) 0.11 (0.47) -0.00 (0.08) 0.36 (0.01) 

0.00 (0.07) -0.07 (0.74) ---­

0.00 (0.33) 0.18 (0.00) 0.00 (0.06) 0.13 (0.04) -0.00 (0.90) 0.18 (0.00) 
Note: the values in parenthesis refer to p-values. Source: Own calculation 
Although the analysis in this paper does not include some advanced economies to make a kind of reference point, it is helpful to compare the estimation results from Table 4 with some of the previous research dealing with developed economies. For instance, Misztal (2014) applied a similar methodology to estimate the employment elasticities in the Global Triad countries. He reveals that the value of the co­
efficient in the 1990-2012 period in the USA, EU-15, and 
Japan were 0.62, 0.50, and 0.25, respectively. It indicates that, generally, employment responds more strongly to 
economic growth in advanced economies. These findings 
are also in accord with the study by Mourre (2006), who reveals that the employment elasticities in the euro area in the period 1986-1990 were about 0.4, and increased to 0.6 in the period 1997-2000, whereas these elasticities in the 
United States were reduced from 0.6 to 0.4 between the first 
and second periods. 
It is necessary to recognize the channels through which economic growth affects employment to properly address the problem of low employment content of economic growth in transition economies. Generally, there are three kinds of 
that influence: direct impact, indirect impact, and an induced impact (Lavopa & Szirmai, 2012). The direct impact is mainly related to the creation of new jobs, which means 
that previously unemployed persons become employed. The indirect effect of economic growth on employment is deter­mined by the relationship between the growing sector and the rest of the economy. If this linkage is stronger, then the indirect effect is more profound. Finally, the induced impact materializes by multiplying the positive effects of economic growth on the labour demand and the improvement of the employment process. 
Therefore, it is important for transition countries to establish a tight linkage between the economy and the labour market. It can be done by improving the labour market policy aimed at increasing the employability. Accordingly, an active labour market policy measures could ameliorate the quality of the labour supply to meet the requirements of the economy in a better way (Card et al., 2018). 
In addition, the source of jobless growth in transition econ­omies can be linked to inadequate industrial policy. Namely, 
it is worth stressing that implementing the "one-size-fits-all" 
paradigm in these countries produces modest results if not 
adapted to the specificities of their economies. One of the 
most important aspects of the problem is premature dein­dustrialisation in some of these countries. While this process stems naturally from the development path of advanced economies, in transition countries it can produce economic growth without a proportional increase of employment 

JB test 5.47 (0.06) 5.16 (0.08) 0.03 (0.98) 
BG LM test 1.78 (0.18) 0.55 (0.58) 2.32 (0.06) 

JB test 0.45 (0.79) 0.83 (0.66) 0.44 (0.81) 
BG LM test 3.57 (0.02) 3.12 (0.04) 2.45 (0.09) 

JB test 0.16 (0.92) 1.03 (0.59) 0.43 (0.80) 
BG LM test 1.36 (0.26) 2.78 (0.08) 1.94 (0.16) 

JB test 5.51 (0.06) 1.33 (0.51) 1.97 (0.37) 
BG LM test 0.299 (0.09) 1.51 (0.24) 1.17 (0.32) 

JB test 0.07 (0.97) -0.43 (0.81) 
BG LM test 3.68 (0.06) -6.39 (0.02) 

JB test 1.94 (0.38) 1.52 (0.47) 0.76 (0.68) 
BG LM test 2.18 (0.13) 1.69 (0.20) 2.33 (0.06) 

JB test 4.25 (0.12) 0.90 (0.64) 4.74 (0.09) 
BG LM test 0.99 (0.37) 0.49 (0.61) 3.61 (0.06) 

JB test 0.44 (0.80) -­
BG LM test 0.65 (0.53) -­

JB test 3.25 (0.19) 0.86 (0.65) 6.31 (0.04) 
BG LM test 2.59 (0.06) 0.19 (0.83) 2.71 (0.06) 
BPG test 0.29 (0.59) 0.07 (0.79) 1.09 (0.30) 
Notes: JB, BG LM, and BPG denote Jarque-Bera test for normality, Breusch-Godfrey test for serial correlation, and Breusch-Pagan-God­frey test for heteroscedasticity, respectively; the values in parenthesis refer to p-values. 
Source: Own calculation 

(Andreoni & Tregenna, 2018). Therefore, the industrial 
policy should be conducted in a manner to provide a more balanced economic growth concerning the sectoral structure of the economy, which would provide a more dynamic em­ployment growth. 

Conclusions and Recommendations 

Although the economic growth-employment imbalances are, in some extent, present in all economies, including the advanced ones, this problem is more profound in the transition economies’ context. The main reason lies in the 
fact these countries strive to “catch up” with the developed 
economies but often without critical approach to the choice of ways to achieve that goal. 
The analysis in this paper finds evidence that in observed 
(former) transitional countries from the Central and South-Eastern Europe is present the jobless growth phe­nomenon. The values of employment elasticities reveal that employment growth is slower than the growth of output. 
Therefore, the first research hypothesis is accepted. The identified sources of that discrepancy could be related to 
the structural reforms, changes in the relationship between the economy and labour market due to the EU accession, premature deindustrialisation, and inadequate active labour market policies which should ameliorate the matching between labour supply and labour demand. Therefore, ad­dressing these problems in observed transition economies could improve the employment content of economic growth, making it more balanced and sustainable. 
As for the seconeypothesis, the analysis does not provide 
enough empirical support to accept it. The estimated values 
of the employment elasticity coefficients give mixed 
evidence about the linkage between the time of completing the transition process and the extent to which employment reacts to economic growth. 
However, there are some limitations of the analysis that should be taken into account. Regarding research meth­odology, there is a possibility to apply a variety of other econometric methods that would provide more valid results (such as Vector autoregression, Autoregressive Distributed 
Lag approach, Generalized method of moments, and so on). 
In addition, the research could incorporate a larger number 
of economies and include some indicators of jobless growth 
related to the sectoral structure of the economy. Finally, this study is only focused on employment as a quantity, whereas the problem of employment quality is not considered. The low quality of employment, or the so-called precarious em­ployment, is a growing problem in transition and developing economies. In line with that, some further research can be focused on the impact of economic growth on employment quality, as the problem which represents the core of the economic development process. 

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Izzivi neravnovesja med rastjo outputa in zaposlenosti v tranzicijskih gospodarstvih 
Izvlecek 

Razmerje med outputom in brezposelnostjo je postalo kljucni del sodobne makroekonomije in je poznano kot Okunov zakon. Vendar pa ima povezava med outputom in zaposlenostjo v kontekstu tranzicijskih in razvijajocih se gospodarstev mnogo pomembnejšo vlogo, ker si te države prizadevajo znatno izboljšati dinamiko rasti obeh spremenljivk. Cilj tega clanka 
je analizirati posebnosti te povezave v izbranih srednje in jugovzhodno evropskih tranzicijskih (in nekdanjih tranzicijskih) 
državah, da bi ugotovili neskladnost med rastjo outputa in zaposlenosti. Zato smo izracunali koeficiente elasticnosti zaposlenosti v odvisnosti od gospodarske rasti. Ocenjeni rezultati kažejo, da v opazovanem obdobju gospodarska rast ni prispevala k zadovoljivi rasti zaposlenosti, kar obicajno imenujemo hipoteza gospodarske rasti brez ustvarjanja novih delovnih mest. Na osnovi teh rezultatov si pricujoci clanek prizadeva izpostaviti kljucne izzive neustreznega ravnovesja med rastjo outputa in zaposlenosti v opazovanih državah in predlagati ustrezne ukrepe ekonomske politike za njegovo zniževanje. Kot najpomembnejši del makroekonomske politike za vecjo uravnoteženost razvoja tranzicijskih gospodarstev poudarjamo industrijsko politiko,ki se razlikuje od paradigme “ena velikost ustreza vsem”.V teh gospodarstvih ima pravtako znatno vlogo kratkorocna stabilizacijska politika, še posebej takšna, ki je osredotocena na trg dela. 
Kljucne besede: ekonomska rast, elasticnost zaposlenosti, Okunov zakon, trg dela, tranzicijska gospodarstva